Big Settlement Exports U.S.-Style Litigation
Posted Apr 11, 2007 4:13 PM CST
By Martha Neil
In a legal milestone that could portend big bucks for plaintiff lawyers in future cases -- and a steady stream of defense fees for those on the other side of the table -- American trial lawyers have settled for more than $350 million a European securities fraud case.
The settlement, which Royal Dutch Shell PLC announced in the Hague today, resolves all claims brought by non-U.S. investors concerning the company's overstatement of the value of its oil and gas reserves, reports the Bloomberg news agency.
The Holland-based settlement was pursued under a new Dutch law partly modeled on the U.S. class action system, and is "the first ever European class settlement of securities fraud claims," says Delaware lawyer Jay Eisenhofer, who is lead counsel for foreign plaintiffs.
The case has a highly unusual procedural posture: "Although there is no legal mechanism to pursue class action, under a new statute never before applied to a securities claim Dutch law allows the court to accept a collective resolution of a dispute as long as both sides petition the court, even in the absence of a civil lawsuit," explains TheLawyer.com.
The settlement provides for $47 million in attorney fees to be paid to American trial lawyers representing foreign plaintiffs, according to the Wall Street Journal [sub. req.], which describes the case as "a further step in a gradual migration of U.S.-style civil-litigation methods to Europe."
Litigation against Shell by U.S. investors continues in federal court in New Jersey, although Shell says it expects to settle that case soon, too. A Dutch court must still approve the $352.6 million settlement with foreign plaintiffs, plus the New Jersey court must agree to exclude foreign investors from the plaintiff class.
Further details and news coverage about the case can be found on the website for Eisenhofer's law firm.